Report says new family of drugs could save billions

These copies may save the US healthcare system as much as USD 44 billion over the next decade, according to recent research. The use of biologics, drugs made from naturally existing proteins in the body, has revolutionized the treatment of many serious and life-threatening diseases.

But expenditure on them has grown nearly three times as fast as traditional drug spending in the US. Biosimilars – approved biologics with comparable quality, safety and efficacy to a reference product that has lost patent protection – may help address this. Only approved after stringent tests, they are so similar to the original that they cannot be told apart in terms of their ability to treat the disease, their safety and quality.

“Biosimilars could create significant savings for the nation’s healthcare system,” said Andrew Mulcahy, associate policy researcher with the RAND Corporation, which conducted the study. “Relieving some of the financial burden could result in wider access to therapy, improved adherence and, potentially, better outcomes for patients.”

The RAND report took into account the experience in Europe, where a regulatory process was created a decade ago and several biosimilars have already been approved. Studies there suggest that biosimilars to treat some diseases are priced 25% or more below their reference biologic products.

The RAND report found eight of the top 20 drugs in the US in 2011 in terms of sales were biologics and that spending on biologics is growing 6.5% a year, compared with 2.3% for small molecule drugs. Patients, who are often asked to bear a share of the cost of drugs, may face financial barriers that affect their access to treatment.

A formal approvals process for biosimilars in the US is emerging. Until the final shape of the Food and Drug Administration’s regulations take shape, however, precise predictions for future growth are difficult. But experts see biosimilars as essential to the future of healthcare because their introduction can increase levels of competition, resulting in a drop in prices and potentially enabling more patients to afford the medicine.

In 2014, Sandoz became the first company to file a marketing application for a biosimilar in the US under the preliminary rules created by the Biologics Price Competition and Innovation Act of 2009.

The RAND report analyzed sales data on more than 100 biologics to estimate the potential cost savings from biosimilars.

The degree of competition from biosimilars in the US remains uncertain. Unlike traditional drugs, which often attract generic competition as soon as their patent expires, biologic drugs are far more difficult to reproduce. Each biologic is uniquely engineered to target a specific type of molecule in the body with the aim of treating a disease. As biologics are made using a complex recipe that’s coded in genetic material, they are highly complex structures and only a few companies – including Sandoz – have mastered the process of developing them.

In 2014, Sandoz became the first company to file a marketing application for a biosimilar in the US under the preliminary rules created by the Biologics Price Competition and Innovation Act of 2009.

On January 7, 2015, the US Food and Drug Administration (FDA) Oncologic Drugs Advisory Committee (ODAC) recommended approval of Sandoz’ investigational biosimilar filgrastim in the US. The committee also recommended approval of the biosimilar for use in all indications included in the reference product’s (Amgen’s NEUPOGEN®) label.

The RAND Corporation study, The Cost Savings Potential of Biosimilar Drugs in the United States, was supported by Sandoz and is available here.